Do Welfare Policies Matter for Labor Market Aggregates? Quantifying Safety Net Work Incentives Since 2007

67 Pages Posted: 19 May 2012

See all articles by Casey B. Mulligan

Casey B. Mulligan

University of Chicago; National Bureau of Economic Research (NBER)

Date Written: May 2012

Abstract

Inflation-adjusted spending on means-tested subsidies has increased sharply since 2007, and most of the growth was due to changes in eligibility rules, and increases in subsidies per eligible person, rather than increases in the number of people who would have been eligible under pre-recession subsidy rules. In 2007, the non-elderly parts of the safety net paid about $10,000 in benefits per person-year that non-elderly heads of household or spouses were unemployed. By the end of 2009, the annual subsidy rate per person-year unemployed was up to $16,000. As a result, the average private returns to employment are substantially less than they were in 2007. One result of the paper is a monthly time series for the overall safety net's marginal income tax rate from the point of view of the average marginal worker.

Suggested Citation

Mulligan, Casey B., Do Welfare Policies Matter for Labor Market Aggregates? Quantifying Safety Net Work Incentives Since 2007 (May 2012). NBER Working Paper No. w18088. Available at SSRN: https://ssrn.com/abstract=2062721

Casey B. Mulligan (Contact Author)

University of Chicago ( email )

1126 East 59th Street
Chicago, IL 60637
United States
773-702-9017 (Phone)
773-702-8490 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
16
Abstract Views
251
PlumX Metrics